In evaluating the adequacy of the allowance for doubtful accounts, an auditor most likely reviews the entity's aging of receivables to support management's financial statement assertion of:
A)existence.
B)valuation or allocation.
C)completeness.
D)rights and obligations.

Question

Quizplus · Accepted Answer

The aging of receivables is used to assess the valuation or allocation assertion, as it provides information on the likelihood of collection and potential write-offs. The existence assertion relates to whether the receivables actually exist, completeness relates to whether all receivables have been recorded, and rights and obligations relate to whether the entity has legal ownership of the receivables.

In Evaluating the Adequacy of the Allowance for Doubtful Accounts